“The continuing uptick in mergers and acquisitions is not surprising,” says Anu Singh, managing director at Kaufman Hall. “The industry is rapidly changing and many organizations are not optimally positioned to navigate the transition to value-based care on their own. Healthcare leaders should thoroughly evaluate the partnership options to help ensure strong, competitive positioning for their organizations into the future.”
A federal judge said Thursday it is unlikely he would be able to rule on both the Aetna-Humana and Anthem-Cigna antitrust suits by the end of the year, according to Reuters.
Lawyers from Anthem and Aetna argued this week that Judge John Bates should hear their cases before the end of 2016. The Justice Department filed suits in July against both mergers, citing competition concerns that it says would increase prices for consumers and stunt innovation.
Bates said in a hearing Thursday that both requests cannot be fulfilled, but did not say which case would be sent for reassignment.
“That’s my determination: that I can’t do both,” Bates said in the hearing, according to Reuters.
Aetna believes it has a simpler case, the article adds. Further, its deal with Humana was announced first.
Anthem’s lawyers, though, point out that if the case is not settled by the end of the year, Cigna will likely refuse to extend their agreement, thus dooming the merger, Reuters notes.
In an interview with FierceHealthPayer, antitrust lawyer David Balto indicated that the Anthem-Cigna merger is “like climbing Mount Everest,” and that they are less poised to battle the DOJ than Aetna and Humana.
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Everyone knows that real estate is no bargain in Northern California. It turns out that giving birth ain’t cheap either.
New research on the cost of childbirth in the nation’s 30 largest metropolitan areas ranks Sacramento and San Francisco as the two most expensive for both vaginal delivery and Cesarean sections.
Sacramento is No. 1, San Francisco No. 2.
The study, based on private health insurance claims from this year and other data, shows the totals actually paid for childbirth by employees and employers. It was conducted byCastlight Health, a San Francisco-based health care information company that analyzes medical costs to help consumers and purchasers compare prices.
A vaginal delivery costs an average of $15,420 in the Sacramento area and $15,204 in San Francisco — nearly $4,000 more than the third-most expensive location, Minneapolis. In the least expensive metropolitan area, Kansas City, a vaginal delivery costs $6,075.
C-sections are even more expensive, costing an average of $27,067 in Sacramento — nearly four times as much as in Pittsburgh, the cheapest city. San Francisco had the second highest cost for C-sections, at $21,799. San Diego came in fifth at $16,810.
The data show that prices vary widely even within the most expensive regions. In San Francisco, for example, the cost for a Cesarean delivery ranged from $8,399 to $41,191 — a five-fold price difference. Patients, however, rarely know how much a procedure will cost until they receive the bill.
Now that our presidential nominees are set and the general election has begun, what do our nation’s hospitals and health systems need to do, whether Secretary Clinton or Mr. Trump is elected in November? They, and their parties, offer stark contrasts, but what will they mean for hospitals?
From a major speech by Sen. Elizabeth Warren to a recent report from the President’s Council of Economic Advisers, there has been a renewed interest by Democrats in monopolies and market consolidation. From tech to airlines, they argue, too many sectors of the economy are being dominated by a few big players.
In American health care, this is not only the case, but has been the default preferred stance. In health care, there is an almost Darwinian belief that the evolution to bigger is better. This is why last year saw 112 hospital mergers (up 18 percent from 2014), and the percentage of physician practices owned by hospitals doubled between 2004 and 2011.
Yet, there is no evidence that consolidation of hospitals and physician practices leads to better clinical outcomes or cost reductions. In fact, recent studies suggest that small, physician-owned practices have a lower average cost per patient, fewer preventable hospital admissions, and lower readmission rates than hospital-owned practices.
That is why it is so unfortunate that, as part of the largest rewriting of doctor payment rules in a generation, the Centers for Medicare and Medicaid Services (CMS) unwittingly has drafted regulations that—as currently proposed—further neglect the power of physician independence and create strong incentives for further consolidation in health care.
S&P Global Ratings has placed Aetna and Humana on creditwatch following the Department of Justice’s announcement Thursday to block their merger.
S&P said it has placed its ratings on Aetna on creditwatch with developing implications, and on Humana and its core subsidiaries on creditwatch with negative implications.
The DOJ also blocked the merger between Anthem and Cigna on Thursday. S&Psaid its ratings on the two insurers would remain on creditwatch negative, where they were placed on June 21, 2015.
Anthem and Aetna have both said they would fight the DOJ’s injunction against their respective mergers in court.
For Anthem’s proposed $53 billion acquisition of Cigna, litigation could be difficult and time-consuming, S&P said.
The International Federation of Health Plans (iFHP) today released its2015 Comparative Price Report, detailing its annual survey of medical prices per unit. Designed to showcase the variation in healthcare prices around the world, the report examines the price of medical procedures, tests, scans and treatments in seven countries.
The report undercuts the idea of what’s being played out in the recent Sutter Health case which alleges the health system is overcharging insurers causing medical costs to be pushed downstream to patients. Last Friday, the suit was allowed to seek class-action status. Matthew Cantor, partner and attorney at Constantine Cannon and lead lawyer for the plaintiffs, told Healthcare Dive the plaintiffs allege to have contracts which require health plans to purchase all the hospital services that Sutter provides in Northern California.
Sutter is “leveraging its larger power in those markets to say to these health plans that they have to also purchase Sutter Health hospital services elsewhere and not only do they have to purchase them but they have to purchase those Sutter services at higher, super competitive prices,” Cantor said, adding that this, in turn, raises the costs of medical services to health plans. These higher costs, Cantor said, are then sent downstream to insurance policyholders.
“Competition is not working,” Sackville told Healthcare Dive. “The market’s not working because if it was, no one would get away with charging $17,000 [for a day of hospital care].”
The report put a focus on the lack of provider competition and consolidation. There’s been a fair amount of consolidation in various states and more systems are pursuing the idea of mergers or partnerships. Such activity, in theory, could bring down competition in an area and tick up costs for consumers as hospitals’ market power grows. “Powerful hospital systems have the ability to raise the prices of medical care. Health plans have no alternative but to take these forced, higher costs upon them because [if they refused] then no one would buy their insurance,” Cantor told Healthcare Dive.
HENRY KOTULA 